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Prof Dr Abdul Hussein Al-Anbuge *: argumentative dinar

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Prof Dr Abdul Hussein Al-Anbuge *: argumentative dinar

By د. عبد الحسين العنبكي
- Posted in 06/06/2017


Ten years ago, and I personally think that deflationary monetary policy incompatible with expansionary fiscal policy, I have written a lot of research and articles in it, as I was writing about the excessive exchange rate for the dinar and how he actively contributed to the destruction of the productive base in Iraq and creating a big deflationary.

This is not me but hard economic theories are saying, is from March to protect foreign product angle, from another angle to make the exercise of the functions of commercial banks lending and credit creation classic idly in front of big profits achieved those banks by trading in currency (dollar) just to enter the auction.

And to note I would like to point out that I didn't demand float dinar, as did Egypt with pound lately, because I am fully certain potential social costs, but demanded for years and where public budgets in periods of prosperity, replete with gradient in raising the value of the dollar against the dinar, any devaluation of the dinar to the dollar is cheap imported fan chased local product.

Some economists, including my brother and colleague, Dr Mohamed Saleh appearance, against this trend when he was an adviser to the Governor of the Central Bank and then his Deputy, until finally when you work in the Office of the Prime contract consultant, who had sought him all excuses for scientific opinion as others' opinions of specialists are respected, without doubt, you have much puzzled last published article in several locations, which was not successful in several scientific Not in terms of style as clamping on preachers to devalue the dinar as treason and they're a bunch of economists supporting terrorism and holders of dollars, is not consistent with any scientific approach, and it is no secret that everyone in Iraq became a wemftdaha known history thanks to social networking sites.

Thus I see to stop grandstanding and accusations and put the interest of the country first and thinking like statesmen in finding a solution to the problem of exchange rate and currency auction.

World crises were mostly brothers crises of deflation (high unemployment) and not because of inflation inflation crisis carries with it greater and consequential operating rates enter distributed production elements, yes inflation eroded purchasing power by for sure, but the rate of erosion rate proportional increase in incomes don't cause panic nor revolution nor collapses as it gets when you hit the economy prompt downturn.

Because we are people of a population growth rate of 3% and we have more than one million young people entering the job market annually, a figure eerily measured by employment not exceeding a quarter of a million jobs, youth unemployment and anger accumulated by Vortex despair and hopelessness has created a time bomb that could devour any spark of fleeting and what to burn everything and everybody, certainly would be far more dangerous than the waves rising prices and economic benign painHamouda socially.

But the economic action can address social burdens Mahmud with time because it will create operational, social action Mahmoud never will be able to get us out of the economic downturn,

but sigrna with time to a more relaxing and more reliance on all imported and more ignorance of trades and professions and production downtime between generations after discontinuation and increased overseas production base theme And Jai inherited and imported technology towards conspicuous consumption, not production, then the Iraqi nation (mother tnabel) in severe danger living on Heaven's gift (oil) and is unfortunately subject to external variables and luster evanescent,

so if we want jobs for our children in the private sector we have to reduce the value of the dinar against the dollar,

what put you know kmerkih to protect the local product, which exercise tax policy (part of fiscal policy) Hamma Filter by the hand and make a cheap dollar to dinar (monetary policy reverse protectionism) but to protect the importer, on the other hand, the effects of contradictory policy, meaning that both (protective wallahmaei) will eat each other as if caught in a vicious cycle, and we don't do anything, that excessive exchange rate margin swallowed by the tariff structure, domestic product remained expelled from the market and remained productive sectors are disabled and we import all our children.

Opponents believe that the rising dollar will make expensive importer carries higher inflation rates, and the fact that I do not deny that the impact in the short term but he soon wear off gradually in the medium and long term, but the impact of the anticipated importing prices is laudable and what didn't go up those prices have devalued the dinar vain and meaningless, and does not achieve the goal.

Goal to make imported expensive name server domestic demand towards domestic product gets production spin rims machinery and employment and distributed more than of production factors,

when the increase in incomes for production elements operating result driven by rising demand for their products is greater than the decline at first glance in the purchasing power of individuals as a result of higher prices of imported goods and services,

the impact The dinar devalued positive have already begun.

This may require a period (incubation) may extend from six months to a year at the most productive activities, so that the length of the period required for adaptation depends on the degree of flexibility of the productive sector and the degree of local supply response to domestic demand vector.

As the production lines mostly unavailable but it is down as a result of supporting economic policy importer for years the production capacities available to accelerate response and reduced the adjustment period (breeding) and by extension the potential social burden while shrinking, where there are more than 70 thousand plant stopped in Baghdad, it is easy if there is demand for the production of these plants to reopen and exercise produce and restart their workers after importing price rises and becomes our local competition.

A good example of Egypt, despite the fragility of its economy than we have, and entry level people is very low, it has been floating the pound, the dollar rose from $1 = £ 700 to 1 USD = 2000 pounds in two years, has resulted in the declining purchasing power of individuals within 40% unless they know that the treatment they underwent stomach time to heal the economy and heal the economy heal society.

We in Iraq whenever we wanted to take this medicine even in periods of prosperity roared and made poor peg to stand with his face, conceals that personal interests don't want addressed particularly since profits whales entering the auction should not be affected.

I crossed through Egypt or almost completely moved production investors returned their plants as long as the Egyptian citizen is no longer able to buy imported to its high price, local product opened doors and laboratory workers and graduates restored and unemployment declined and the economy is in the process of recovery is still at first and gradually increasing balance of trade improvement indicators for various goods watching periodically going high rates for Egyptian products.

And we're still planning on Byzantine discussions and stick to each other without the accusations wrong serious step to see the auction currency. In periods of prosperity stopped me some brothers including Dear Doctor appearance, in 2008 and in 2010 and in 2012 and 2013 where budgets are stuffed, and stopped me by the same argument that prices will rise and will have a negative social impact.

OK, my teacher Fadil I originally wanted because the prices of imported goods rise, otherwise the target cannot be achieved, is a side effect of a basic treatment will inevitably do, does it make sense for cancer patient refuse treatment with chemo because the ball will fall.

My brothers, honestly if we worked this treatment since then to our economy recovered and regained the hair falling, and the Government could in those periods to increase allocations for social protection to prevent fragile slices, instead of large investment called customizations bellowed in flooring tiled streets repeatedly and leaving the streets are not bountiful, tiled pavement removal and re resurfaced repeatedly in order to provide easy opportunities for growth in a beached whale Sade absent serious Sergeant whatever sometimes.

And still the opponents to reduce the exchange rate of the dinar to today, much to the economy and the people who run the operation with the same argument and sobbing over the poor, but were encouraged to go to external borrowing and enter a dark tunnel country indebted to continue pumping millions daily in order to maintain currency auction virginity dinar from scratch and maintain profits auction goers.

Macroeconomic virginity became threatened, still clinging, there are hundreds of billions of dollars we can get from our economy when we adopt (cost/benefit) accounts for each of the assets owned by the State, and when the State of land and property assets of the disabled and neglected large gratuitously, and could obtain billions of dollars if sold or made them private in any suitable method for privatization, but haven't done it yet, or it's going very slowly, for she too busy paying attention to the outside only ( Oil revenues or borrowing).

They don't understand there is no alternative.

The Ministry of Finance of monopolised loosely borrowing and revitalise the economy as maximizing revenues or is unknown, and there might be a sentimental reasons or barasikologih I don't know, maybe just ignore it, and no power except with Allah almighty.


(*) The Chairman of the Organization of our economy for sustainable development

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